Bill Text: TX HB4163 | 2021-2022 | 87th Legislature | Introduced
Bill Title: Relating to a funding soundness restoration plan for certain public retirement systems.
Spectrum: Bipartisan Bill
Status: (Introduced - Dead) 2021-03-29 - Referred to Pensions, Investments & Financial Services [HB4163 Detail]
Download: Texas-2021-HB4163-Introduced.html
87R7543 JCG-D | ||
By: Longoria | H.B. No. 4163 |
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relating to a funding soundness restoration plan for certain public | ||
retirement systems. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Section 28(h), Texas Local Fire Fighters | ||
Retirement Act (Article 6243e, Vernon's Texas Civil Statutes), is | ||
amended to read as follows: | ||
(h) A retirement system established under this Act is exempt | ||
from Subchapter C, Chapter 802, Government Code, except Sections | ||
802.2017, 802.202, 802.205, and 802.207. | ||
SECTION 2. Section 802.2015(b), Government Code, is amended | ||
to read as follows: | ||
(b) This section applies to a public retirement system and | ||
its associated governmental entity other than a public retirement | ||
system and its associated governmental entity subject to Section | ||
802.2016 or 802.2017. | ||
SECTION 3. Subchapter C, Chapter 802, Government Code, is | ||
amended by adding Section 802.2017 to read as follows: | ||
Sec. 802.2017. FUNDING SOUNDNESS RESTORATION PLAN FOR | ||
CERTAIN PUBLIC RETIREMENT SYSTEMS FOR FIRE FIGHTERS. (a) In this | ||
section: | ||
(1) "Funded ratio" has the meaning assigned by Section | ||
802.2011. | ||
(2) "Governmental entity" has the meaning assigned by | ||
Section 802.1012. | ||
(b) This section applies only to a public retirement system | ||
governed by the Texas Local Fire Fighters Retirement Act (Article | ||
6243e, Vernon's Texas Civil Statutes), and its associated | ||
governmental entity. | ||
(c) A public retirement system shall notify the associated | ||
governmental entity in writing if the system receives an actuarial | ||
valuation indicating that the system's actual contributions are not | ||
sufficient to amortize the unfunded actuarial accrued liability | ||
within 30 years. The governing body of the public retirement system | ||
and the governing body of the associated government entity shall | ||
jointly formulate a funding soundness restoration plan under | ||
Subsection (e) if: | ||
(1) the system's actuarial valuation shows that the | ||
system's amortization period exceeds: | ||
(A) 40 years; or | ||
(B) 30 years and: | ||
(i) the funded ratio of the system is less | ||
than 65 percent; or | ||
(ii) the funded ratio of the system is 65 | ||
percent or greater and the system receives: | ||
(a) if the system receives an annual | ||
actuarial valuation, two more consecutive actuarial valuations | ||
that show the funded ratio of the system is 65 percent or greater; | ||
or | ||
(b) if the system receives actuarial | ||
valuations every two or three years, one more consecutive actuarial | ||
valuation that shows the funded ratio of the system is 65 percent or | ||
greater; | ||
(2) except as provided by Subsection (d), a funding | ||
soundness restoration plan formulated under Subsection (e) or | ||
Section 802.2015 is not already in effect; and | ||
(3) the board has not exempted the system from the | ||
requirement to formulate a funding soundness restoration plan in | ||
accordance with the rules adopted under Subsection (h). | ||
(d) The governing body of a public retirement system and the | ||
associated governmental entity that have formulated a funding | ||
soundness restoration plan under Subsection (e) shall formulate a | ||
revised funding soundness restoration plan under that subsection | ||
if, based on the most recent actuarial valuation, the board | ||
determines that the previously formulated funding soundness | ||
restoration plan has not been adhered to. | ||
(e) A funding soundness restoration plan formulated under | ||
this section must: | ||
(1) be developed by the public retirement system and | ||
the associated governmental entity in accordance with the system's | ||
governing statute; and | ||
(2) be designed to achieve a contribution rate that | ||
will be sufficient to amortize the unfunded actuarial accrued | ||
liability within 30 years not later than the 10th anniversary of the | ||
date on which the final version of a funding soundness restoration | ||
plan is agreed to. | ||
(f) A public retirement system and the associated | ||
governmental entity that formulate a funding soundness restoration | ||
plan shall report any updates of progress made by the entities | ||
toward improved actuarial soundness to the board every two years. | ||
(g) Each public retirement system that formulates a funding | ||
soundness restoration plan as provided by this section shall submit | ||
a copy of that plan to the board and any change to the plan not later | ||
than the 31st day after the date on which the plan or the change is | ||
agreed to. | ||
(h) The board shall adopt rules for the administration of | ||
this section, including a procedure for a public retirement system | ||
subject to the requirement to formulate a funding soundness | ||
restoration plan under this section to request from the board an | ||
exemption from the requirement based on: | ||
(1) the system's adoption of actuarially determined | ||
contribution rates; and | ||
(2) one or more actuarial valuations of the system | ||
showing the system's amortization period is projected to become | ||
within a reasonable period an amortization period not exceeding 30 | ||
years. | ||
SECTION 4. As soon as practicable after the effective date | ||
of this Act, the State Pension Review Board shall adopt the rules | ||
required by Section 802.2017(h), Government Code, as added by this | ||
Act. | ||
SECTION 5. A public retirement system is not required to | ||
formulate a funding soundness restoration plan under Section | ||
802.2017, Government Code, as added by this Act, based on an | ||
actuarial valuation made before the effective date of this Act. | ||
SECTION 6. This Act takes effect September 1, 2021. |